Tax Revenue Doesn't Reach Taget Due To Decreased Receipt Of VAT And VAT

JAKARTA - The Ministry of Finance (Kemenkeu) noted that the realization of tax revenues until December 2024 reached Rp1,932.4 trillion or only 97.2 percent of the target in the 2024 State Budget which amounted to Rp1,988.9 trillion.

Tax observer from the Center for Indonesia Taxation Analysis (CITA) Fajry Akbar said that so far the main contributors to Indonesia's tax revenue came from the Income Tax (PPh) of the Agency and Value Added Tax (VAT).

"The drop in corporate income tax revenues and the dragging of VAT revenues have an impact on our tax performance in 2024," he said in his statement, Tuesday, January 7.

Fajry said that historically the tax performance had indeed been hit in early 2024.

The growth in tax revenues until April 2024 contracted to 9.29 percent, and domestic value added tax (VAT) (DN) revenues continued to contract double-digit until April at 13.9 percent.

"There was an increase in VAT restitution at the beginning of the year," he said.

Fajry said that while for corporate income tax, in general, it illustrates that the performance of corporations 1-2 years ago saw a decline in corporate profitability, especially those that manage commodities or commodity processing.

"This is then the reason for the negative growth in corporate income tax performance," he said.

However, Fajry also appreciated this year's tax performance.

Although it is difficult, he said, there are several positive achievements such as significant improvements in PPh 21 performance.

"This year, PPh 21's performance has increased significantly due to improvements in regulations and institutions. As a result, PPh 21's performance for the year was able to grow 21.1 percent," he said.

Furthermore, Fajry conveyed, the performance of VAT and PPnBM was able to achieve the target even though it contracted very deeply at the beginning of the year.

In March 2024, VAT and PPnBM revenues were still contracting double-digit but at the end of the year they could still grow positively.

He gave an example, tax revenue in August still contracted 4.04 percent, but in November it had grown positively 1.05 percent and in December it grew 3.38 percent.

"It seems that there is an extra effort from the institution. We can see this from the growth in revenue at the end of the year," he added.

Fajry said, for the 2025 State Budget, the tax revenue target is quite high.

In general, the government needs additional tax revenue of IDR 256.9 trillion from the realization in 2024 to achieve the 2025 revenue target or grow 13.29 percent.

"It is not an easy target, without extraordinary efforts and policy breakthroughs, it is not impossible that this 2025 tax revenue will not be achieved," concluded Fajry.